Peter Thiel’s Long/Short Singularity Market Apocalypse Trading Technique

Peter Thiel of Clarium Capital (and the Founders’ Fund) has an entertainingly different and unusual view of the markets:

…[Peter] Thiel described “a world full of massive manias, booms and busts on a scale unprecedented in all of history.” Sound familiar? It should, if you agree with his thesis.

“Interestingly, if you actually look at the world’s financial market over the last 25 to 30 years, that is exactly what they have manifested in,” Thiel said. When, instead of stocks moving up six or seven percent a year in a smooth monotonic function (as the conventional wisdom of the market dictates during our age of information glut), they actually got more volatile, this started to intrigue Thiel.

In essence, he argues that each of these booms represent different bets on the singularity, or at least on various things that are proxies for it, like globalization. What’s more, we’ve been seeing them now for over 30 years.

…”Over the past two or three years, we’ve seen a series of new booms…which one do you believe,” he rhetorically asked.

…”One of them is going to be real,” he concluded, “or the world is going to come to an end.”

Even though I disagree with his statistics (no real market ascends 7% in a year a smooth monotonic function), I’ll say this much for Thiel’s long/short singularity market apocalypse trade: It’s definitely not crowded.

[via Epicenter]

Related posts:

  1. Bloomberg Profiles Peter Thiel (of PayPal and Clarium Fame)
  2. Fun China Market Factoid: Four Trading Accounts a Second
  3. Petrodollars, Market Volatility, and Home R&D
  4. Insider Trading — Bond Guys Can Play Too
  5. More on IPOs: Supply & Demand in the U.S. Stock Market

Comments

  1. Ben Hyde says:

    Illustrated in this link, i think?
    http://www.designverb.com/2007/06/11/tunnel-house

  2. .”One of them is going to be real,” he concluded, “or the world is going to come to an end.”
    Umm, why is this self-evidently true? Seems to me that it’s like saying one of the preachers raving on the street is going to be the real thing – they can all be wrong.
    Things-could-get-much-better,-or-they-could-get-much-worse, is true, and I suppose worth keeping in mind at some level.
    But it is interestingly true that more information DOES NOT necessarily lead to more stability – or at least, not on the level one might naively believe. People tend to think that Efficient Market means low-volatility, but that’s an implication they draw which is not stated, indeed seems to be mathematically false. Though it is very counter-intuitive.